VAT tax record keeping in the UAE

Federal Tax Law of the UAE requires all enterprises that conduct VAT transactions in the country, to carry out mandatory registration of these financial transactions and to fill the reports on them in the FTA. According to the recently introduced law, every onshore company in the country that carries out any kind of activity is obliged to keep accounts and commercial books. The reports, when presented to the FTA, must contain accurate and up-to-date data.

The law also states that any legal entity (if it falls into the category of companies that are required to register for VAT taxation) must register for it in accordance with the established procedure.

The Tax Registration Number (TRN) received as a result of registration of the company must be mentioned in all relevant documents and correspondence with partners and tax authorities.

Also, all companies that fall into the category of VAT payers must fill out a special form within 20 days if there is a change in the data related to VAT reporting.

According to the adopted standards, the minimum annual turnover being subject to VAT at which the company in the UAE is obliged to register as a VAT payer is 375,000 dirhams. But even if the company is not subject to registration, it must keep its financial records, in case FTA decides to check whether the company is subject to compulsory registration of the VAT payer.

Such records should be kept in the company for at least five years, according to tax laws in case of the possible check.

A registered company which carries out taxable supply must issue the original tax invoice, which is transferred to the recipient of the goods, and in the case of a non-receipt of the recipient, this tax invoice must be kept in the reports.

As for companies that deal with real estate, the law demands them to keep financial records for 15 years. (according to the executive regulations issued by the Federal Tax Authority (FTZ)).